Answer to Question #69293 in Accounting for richard

2017-07-12T17:51:03-0400

Question #69293

explain all about sunk fund account and solve an example

Expert's answer

2017-07-14T13:20:06-0400

A sinking fund is fund which is created for a specific purpose. The sinking fund is created for following purposes:1) To redeem or repay long term liabilities. For example: debentures, long term loans etc.2) To replace a wasting assets. For example: mines etc.3) To replace an assets of depreciable nature. For example: fixed assets.